(Washington)

Munis bonds have done well recently, but the ultra-low rate environment seems to have confused many about their relevance. It is critical to remember that despite yields being so low, munis still very much have a place in the environment. In fact, one could argue the current environment is better for munis than a more conventional one. The reason why is that munis still have a major spread advantage versus taxable equivalents. For example, while munis only yield an average of 0.86% right now, that translates to a taxable yield of 1.53% for those in the top income bracket. However, as we all know, Treasury yields are still much nearer to 1%, meaning munis current enjoy a major advantage over taxable bonds.

FINSUM: Given Biden and the Democrats’ support of state and local municipalities, and munis’ currently yield advantage, there is no reason for the asset class not to have a great year.

(Washington)

President Biden wasted no time in appointing a new Department of Labor chief. He has named Martin Walsh as Secretary of Labor. Walsh is currently the mayor of Boston and his history offers some insights into what his agenda may be. The Democrats have made very clear that one key component of their agenda is to undue the current DOL 2.0 rule and revamp it with a much stricter Obama era-like rule. That said, the naming of Walsh slightly complicates that picture. He was a union leader in Massachusetts and Biden has celebrated that Walsh is the first union member to lead the DOL in over half a century. Therefore, most think his immediate focus will be on workers’ rights issues and the gig economy rather than on wealth management.

FINSUM: It is hard to say how this will play out, but the naming of Walsh certainly makes it seem like a new rule may be slower in coming than some have feared.

Gold had a very strong 2020 as investors feared chaos from the pandemic. See the full story here on our partner Magnifi's site

Advisors don’t need to be told that rates are at ultra-low levels. Yet despite this, munis are still maintaining their attractiveness. See the full story here on our partner Magnifi's site.

(New York)

The market has been a bit choppy to start the year, including a loss over the last five days. See the full story here on our partner Magnifi's site.